Connect with us

Industry

“Game changer” for the sector: First cannabis company expected to list on LSE next month

Published

on

Founder and CEO of Kanabo, Avihu Tamir

Kanabo, an Israeli medicinal cannabis company, is expecting to become the first cannabis firm to list on the London Stock Exchange.  

On the condition that all FCA (Financial Conduct Authority) requirements are met, the company is expecting the IPO (initial public offering) to take place in February this year.

The company finished a two-week virtual roadshow [a series of presentations made to investors ahead of an IPO] on Friday.

Speaking to Cannabis Health, founder and CEO, Avihu Tamir revealed that the it had an over-subscription almost 300 percent higher than its £3.2 million target.

“Everyone was telling me ‘it’s not the US, it’s not Canada, people don’t understand cannabis here. British people are more cautious, more conservative, it will be more challenging’,” Tamir said.

“Perhaps the questions that were asked were different than the questions that you would be asked when meeting US investors – maybe the knowledge base was a bit lower, but other than that interest and the understanding of the potential of the market was totally there.

“Now, what we’re doing this week is sending emails to people to say sorry, but they can only invest half of what they were planning to.”

Kanabo founder, Avihu Tamir

Kanabo, based in Tel Aviv, has developed the world’s first medicinal cannabis vapourising device, which delivers a metered dose of cannabis extract.

Smoking cannabis flower is a popular administration method for those suffering with chronic pain, however it gives a different dose on every inhale which prevents medical professionals from accepting smoking as a medicinal delivery method.

Kanabo’s VapePod, which can deliver a metered dose has already had initial sales in a pilot in the UK and Germany. They are expecting that the CE mark for the second generation medical device will be given in the first or second quarter of this year.

In Israel, approvals for the device are in the final stages. The vapourising device, which ensures the controlled application of cannabis-based medicines, is approved for use in hospitals and the company has recently embarked on a clinical trial to demonstrate bioavailability and safety.

Up until recently, regulations surrounding the public listing of cannabis firms has been unclear. However, since the FCA released a set of rules in September 2020, cannabis companies were quick to set things in motion.

MGC Pharmaceuticals, which develops and produces phytocannabinoid medications, and Emmac, one of Europe’s largest cannabis firms, are also in the race to list on the stock market in 2021.

Tamir is confident, however, that Kanabo will be the first to hit the milestone.

“It’s more than reasonable that we will be the first, but I do hope we won’t be the only ones,” Tamir said.

“Part of pushing the industry forward is having more and I hope others, like MGC and Emmac, will join very soon.

“Once they [other companies] see the listing, they will start approaching the LSE. Suddenly the UK is a relevant market.

“There is a process of usually six months for doing the listing and the prospectus, so the next peak of companies coming into the LSE will probably be in six months to eight months’ time.”

Tamir believes the IPO (initial public offering) will be a “game changer” for the cannabis industry, which is predicted to be worth billions in Europe by the end of the decade.

“Once you have the public market in a certain country being opened up, you suddenly see the shift in how the cannabis industry is being perceived by decision makers,” Tamir added.

“Once you start to see these [cannabis] companies going to a public market, everything changes and the discussion is different; suddenly […] it’s a legitimate business, it is not a drug anymore. It is a medicine.

“We all know that alcohol and tobacco are not healthy, but they’re totally legitimised because it’s a business. And that’s the change; its the shift in the mindset of decision making. If they think of it as a public company, it’s respectable, it’s something real.”

Industry

Dutch cannabis experiment could see more patients turning to coffee shops

A four-year experiment aims to try and solve the Netherland’s ‘backdoor’ cannabis criminality problem.

Published

on

cannabis experiment Netherlands
Recreational cannabis use has been tolerated within the walls of the Netherland's coffee shops since the 1970s

A four-year experiment to try and solve the Netherland’s ‘backdoor’ cannabis criminality problem could see patients turning to coffee shops for easier access.

The cultivation and sale of cannabis for recreational purposes are strictly prohibited in the Netherlands – unless you are visiting one of the country’s famous coffee shops.

These establishments are allowed to sell small amounts of cannabis but operate under strict rules, including a limited stock of 500 grams.

On a municipal level, authorities can decide how many coffeeshops it will allow if any, and as the country deals with a growing number of “drug tourists”, individual municipalities can choose to ban foreign visitors from entering the region’s coffee shops.

Although the sale of the drug is tolerated, coffee shops face a contradiction in Dutch law known as the ‘backdoor policy’. Shops can sell the drug to their customers, but their suppliers are forbidden from cultivating and selling cannabis to them. In other words, sales through the front door are allowed, while sales through the backdoor are not.

“As a result of the policy of tolerance, the sale of cannabis to users is permitted, but the cultivation, sale and purchase of that cannabis is prohibited, which easily leads to crime. After all, the coffee shop needs to be supplied,” said Ellen Gielen, head of the life sciences group at global law firm, CMS and co-author of the company’s ‘Expert Guide on Cannabis Legislation’.

“The discussion to legalise the supply of coffee shops with cannabis has been going on for several years.”

A 2008 “weed summit” brought together 33 Dutch mayors from various municipalities and different political parties to discuss drug tourism in border regions. A survey carried out by the evening newspaper NRC Handelsblad revealed that 80 percent of the mayors in attendance were in favour of ‘regulating the backdoor’.

Over a decade later, the Netherlands is now embarking on an experiment across ten municipalities to evaluate the effects of a closed supply chain for coffeeshops.

Ten commercial cultivators will be made exempt from current laws, allowing them to sell and deliver quality-controlled cannabis to a total of 79 coffee shops.

The experiment is known as the ‘controlled cannabis supply chain experiment’.

The legally produced cannabis will have to be lab-tested and meet the Dutch government’s quality, labelling and packaging requirements. But there will be no limit to the THC concentration and producers can set their own pricing.

Cultivators applied to be part of the study in July 2020 and are due to be selected this month before the Dutch government kick starts the four-year experiment.

“The aim is to see if and how cultivators can supply quality-controlled cannabis to coffee shops in a decriminalised way,” Gielen added.

“In addition, the government wants to examine the effects of the experiment on the problems that some municipalities experience – for instance, on crime and public health.

“The experiment means that more suppliers and cultivators are contracted by the government and there are more options for the sale of seeds and or cannabis.”

Gielen anticipates that recreational use through coffee shops will, in part, substitute medicinally prescribed cannabis.

“Doctors are holding back from prescribing cannabis and health insurance companies, in general, do not reimburse for medicinal cannabis,” Gielen said.

“Some patients therefore choose to get their cannabis at coffee shops.”

Although it has been legal for any physician to prescribe medical cannabis in the Netherlands since 2003, treatment guidelines do not encourage prescribing due to the lack of clinical evidence.

“Especially now that the government is planning to supervise the supply and quality through the experiment, expectations are that medicinal users will switch to the freely available recreational cannabis, as they have to pay for it anyway.”

A research consortium that includes Breuer & Intraval, Rand Europe and the Trimbos Institute was commissioned by the Dutch government and will carry out an evaluation over the four-year period.

The consortium will investigate the impact of the experiment on health, user experience, nuisance and displacement effects.

Stijn Hoorens cannabis experiment

Stijn Hoorens, senior research leader at RAND Europe

“We will conduct numerous interviews with coffeeshop owners, municipalities, police and other stakeholders,” said Stijn Hoorens, senior research leader at Rand Europe.

“We will count coffeeshop visitors and conduct a survey amongst customers and ask them about their purchasing and consumption behaviour.”

The Trimbos Institute, meanwhile, will take cannabis samples from coffeeshops in both experimental and control cities and have them lab-tested and compared.

“At RAND, we will also aim to measure some of the developments outside the coffeeshops and whether we could observe any displaced effects on the illegal market,” Hoorens continued.

“This is very difficult, because we don’t have a reliable picture of what’s happening in the illegal market in the first place, let alone as a consequence of the experiment, but we’ll try.”

The results from the ten multiplicities involved with the experiment will be compared with a control group of ten other regions where the current laws are maintained.

The conclusions of the study will later be used by the government to decide on its next steps for designing the future of cannabis policy, however Hoorens said the main objective was not to reduce illegal production or curb organised crime.

“The primary objective is to test whether it is at all possible, or feasible to design, operate and enforce a closed supply chain for decriminalised cannabis,” Hoorens said.

“If the main actors in the supply chain, producers, distributors, coffee shops, consumers, local authorities and law enforcement are happy, the experiment has succeeded. However, we are also asked to attempt to measure the effects on public health, public safety, nuisance, crime, and displacements effects.”

At such an early stage, it is difficult to predict the outcome of the experiment, but Hoorens believes it is unlikely that the “backdoor” policy will still exist in the Netherlands after the four-year experiment.

“We have a number of hypotheses that we will test, but anything could happen,” Hoorens added.

“If customers don’t like the legally produced cannabis, the illegal market might thrive. If the legal products turn out to be a success, there might be a displacement from the illegal market, and perhaps even from other cities towards the coffee shops in intervention cities.

“I think it’s fair to say, that it is unlikely that the situation with a decriminalised front door and a criminalised back door will still be present in the Netherlands.”

Continue Reading

Feature

Greenheart’s ‘groundbreaking’ tech is set to revolutionise hemp farming

Cannabis Health speaks to the Irish CBD company that is on track to revolutionise the sector. 

Published

on

 

Cryptocurrency, state of the art cold-press technology and an AI drone that allows cultivators to produce up to five times the yield of an average farm: Cannabis Health speaks to the CBD company that is on a path to revolutionise the sector. 

Hemp cultivators will know that only female plants can grow flowers; the component from which cannabinoids are extracted to make CBD products. Male plants on the other hand only produce pollen sacs, a useful tool for breeding but detrimental for farmers seeking to produce a high yield of usable hemp. 

In the 1970s, cannabis and hemp growers discovered that growing only female plants or removing male plants before they matured boosted both the yield and potency of their end product. 

They found that the longer a female plant is left unpollinated, the larger it will grow, meaning farmers can produce a greater number of flowers with a higher yield of cannabinoids. 

A 1998 study confirmed this, revealing that pollination of female plants resulted in a yield 56 percent lower than an unpollinated crop.   

To maximise their profits, some farmers inject a huge amount of time and resources into identifying and removing male plants before they release their pollen. However, distinguishing between the two sexes is a near impossible task. Male and female plants look almost identical until the flowering stage, at which point it is too late to prevent pollination. 

Farmers can buy feminised seed to sidestep this issue, however very few can justify the significantly higher costs compared to scattered seeds which contain both genders. 

But Irish company Greenheart CBD has partnered with Canadian technology firm, Zenadrone, to develop an artificial intelligence drone that can solve the problem. 

Greenheart CBD

Greenheart CBD co-founders Mark Cavanan and Paul Walsh

The six-foot drone features a robotic arm that can pinpoint and remove the male plants before pollination. The result is a crop consisting only of unpollinated female plants with space to grow to their maximum size. 

According to Greenheart co-founder, Paul Walsh, an average farmer in Ireland would expect to produce around 200kg of dried flower per acre. Using its drone technology, Greenheart is able to yield 1,000kg per acre. 

“There’s nothing else like it in the world, it’s completely groundbreaking,” said Walsh.

“It’s like when the tractor first came to the farm – well this is the new tractor.”

The drone also serves as a security tool, with camera systems which are connected to a mobile app meaning farmers can monitor their crop 24 hours a day. And as well as boosting profitability by allowing for a higher yield, it also collects data throughout the process, ensuring full traceability of the hemp plants from the farm, through its production facility, where cold press technology is used to extract cannabinoids and terpenes from crops. 

As opposed to the more popular methods of extraction using CO2 or ethanol, cold-press technology subjects hemp flower to high pressures at relatively low temperatures to produce an extract that contains the entire spectrum of cannabinoids and terpenes. 

Greenheart has now developed several cosmetic products along with three flavours of CBD-infused popcorn, with a new range of protein-based CBD products under development. 

Before venturing into the cannabis and CBD sector, Walsh built a career in blockchain technology, working for a number of multinational tech companies, including PayPal. After several years in the sector, he decided to return to his home country of Ireland to integrate the cryptocurrency system into the Irish hemp sector. 

In 2019, he teamed up with fellow entrepreneur, Mark Canavan, and the duo set out to address some of the key challenges faced by the sector.

“While doing market research for a previous company, I noticed that a lot of farmers were in a bad state of affairs,” Walsh said. 

“A couple of farmers were taking the risk and trying to grow hemp. When I got to them and asked them what the problems were, they had no infrastructure, they had no sales channels, they really didn’t know what they were doing or how to get this crop to market. 

“They could grow an absolutely fabulous crop, but when it came to the processing of the crop, and getting it to the market it was something that they were lacking [expertise] in.”

The strict laws and regulations surrounding cannabis has led to CBD companies facing various issues with banking and payment processes. Many struggle to build relationships with mainstream payment providers and instead have to rely on high-risk payment processors with high fees to sell their products. 

In an effort to tackle these issues, Greenheart CBD made the bold decision to launch its own cryptocurrency called Punt, named after the old Irish currency. Through Greenheart’s mobile application, customers can buy its products and earn rewards and exclusive discounts for using the new Punt.

“It solves a lot of issues,” Walsh said.

“There are lower transaction fees and it is very adaptable for our customers. The benefits of this cryptocurrency is that as the project grows, the price grows.”  

With the data gathered from the AI drone, coupled with the financial data collected through its mobile app, Greenheart is able to trace all of its products back to the original source and make the information available to the end-consumer. 

“We have a completely transparent chain, literally from the farm itself to the currency,” Walsh explained. 

“In our mobile app we have a QR code scanner so on every product that you get, you can scan the QR code and get access to all the information about the plants,  the farm where it was grown, the processes it went through, the blend that it went through, what it was mixed with and the travel lifecycle of the product. 

“All the information needed for you to make a sound decision on whether this product is high quality, and whether it’s worth the money.”

Greenheart’s efforts to bring cutting edge tech into the hemp sector hasn’t gone unnoticed. This year, the company received an All-Star Award from the All-Ireland Business Foundation and Walsh was accredited as a thought-leader in innovation, technology and sustainability. 

Greenheart has experienced exponential growth since its launch and is now shipping its products to 49 countries. In its first year, the company grew by 500 percent and is expected to grow by a further 1,000 percent in 2021. 

The company is now developing a “plug and play system” so other farmers can use the innovative technology. The 40ft container can be installed on any farm and allows cultivators to immediately start growing their own hemp crops, manufacture products and get their products out to market. 

“This technology is very low cost and efficient,” Walsh said.

“We’re taking all this technology and combining it together, making a plug and play system that you can drop onto any farm or any location in the world.”

The young company now has its sights set on international expansion with a new production facility under construction in New Jersey, USA and plans to build another facility in Queensland, Australia.

“We’ve grown exponentially and now we’re looking to expand globally to any farm or location in the world,” added Walsh.

“This will enable farmers to start growing the hemp crop and producing a high quality product and with the drone recording the data we can relay that back to any government or government agency which requires full transparency.”

Continue Reading

Industry

Inside Scotland’s first medical cannabis production facility

With a 120,000 square ft facility in development, Hilltop Leaf is set to become one of the largest cannabis production companies in the UK.

Published

on

The Hilltop Leaf facility in Dumfries, Scotland

With a 120,000 square ft facility under development, Hilltop Leaf is well on the way to becoming one of the largest medical cannabis production companies in the UK. Cannabis Health hears about its groundbreaking new cultivation facility on the Scottish borders.

The UK-based private cultivation and extraction business, Hilltop Leaf is constructing Scotland’s very first medical cannabis cultivation and production facility. Once completed, the company will become one of the UK’s first domestic cannabis brands. 

The UK currently has an estimated 1.4 million medical cannabis users, the majority of whom source their products from imports via private clinics, the illicit market or from plants grown at home. 

Hilltop is aiming to change this. With its £15 million facility located in Dumfries, the company says it is on a mission to produce cannabis-based medical products, including full spectrum cannabinoid oils and Active Pharmaceutical Ingredients (APIs), that are suitable for specialist prescription in the UK. 

The 120,000 square feet site will contain both a cultivation and extraction facility allowing the company to produce CBMPs that are grown, processed and manufactured in the UK, reducing the country’s reliance on imports. 

“One of the biggest issues that we face in the UK is access to cannabis products, which I think is one of the reasons why the market has developed so slowly,” Hilltop CEO and co-founder, Hamish Clegg, tells Cannabis Health.

Hamish Clegg

Hamish Clegg (left) co-founded Hilltop Leaf with Neil and William Ewart.

Having built relationships with clinics and distributors including Sapphire Medical Clinic, Lyphe Group and Health House, Hilltop says its cannabis medicines could be prescribed to UK patients by early 2022. 

The site is built in an undisclosed, “secluded” area on the Scottish borders. Sheltered, free of pesticides and with an abundant clean water supply, the facility is situated in an ideal location for producing products that meet the EU’s rigorous GMP standards.

The site also has potential to harness renewable energy to power its operations. Behind it is a wind farm which the company intends to utilise alongside its own running water to create a fully carbon-neutral facility. 

Having finished construction of the early shell, Hilltop is now progressing licence applications with both the Home Office and Medicines and Healthcare products Regulatory Agency (MHRA). It also plans to run a pilot in the coming months ahead of its application for a commercial cultivation licence. 

“We can’t go into immediate all-out production, we need to solve the route to market first. This will enable us to define our products and select our genetic strains,” Clegg says. 

“Our plan is to do something small; define our product with a pilot, which will be a modular grid within our facility.  The end product initially will be destroyed but the plan is that once we’ve defined our products, we will then be able to apply for a commercial cultivation license.”

The early stages of construction have been supported by £735,000 of Government funding from South of Scotland Enterprise, which Clegg says has “put the wind in its sails”. 

Hilltop is now embarking on an external capital raise to fund the next stage of the project. The company has EIS Advanced Assurance from HMRC for its ongoing seed round which aims to raise between one and two million for the engineering, design and early construction of the site. This will be followed by series A equity funding round to finance site construction, QMS validation and staffing.

Hilltop Leaf was launched in 2019 by Clegg, a former investment banker, and agricultural experts, Neil and William Ewart.

Despite the lack of sun in Scotland, building a production site in the UK was important to Hamish and his team. 

“I want to help build the UK medicinal cannabis industry and be one of the early movers in that,” Clegg says.

“We’re not in it for a quick buck. We’re investing hard cash, to develop infrastructure, develop relationships and develop supply chains, so that this is something to stay. 

“We’re proud to be a British company and we want to build a British industry to that standard.”

Hilltop Leaf Greenhouse constructed by Cambridge HOK

As owners of the land on which the new facility is being built, co-founders Neil and William Ewart have strong connections to the local area. 

The south of Scotland is known to have higher-than-average rates of unemployment compared to the rest of the UK and as the region also faces a number of healthcare issues, Hilltop hopes that the site will support the local people and the economy. 

Clegg added: “There’s a big unemployment problem in the south of Scotland and it has many healthcare demands in that part of the country that could be helped by introducing medicinal cannabis as a clinical option.

“We have tonnes of local support. The community, councillors and local MPs all wanted to build a medicinal cannabis business in the area that we are [based] in. 

“We hope to be a big employer and someone who’s developing the local community in an environmentally friendly way.” 

Starting with an early headcount of less than 20 with roles across security, administration and quality assurance, Hilltop eventually expects to employ upwards of 50 people. Local contractor Paul Davison has already been enlisted to help with civil works, and with support from locally-based firm Mark Seed Forest and Land Management on the initial planning application, the project has largely been welcomed by the local community, according to Clegg.

Alongside its plans to produce medical-grade cannabis medicines, Hilltop intends to import products to the UK. The company is working in partnership with MG Health, a medical cannabis cultivator and manufacturer based in Lesotho. The landlocked country bordering South Africa has become a hotspot in recent years for cannabis cultivation. 

Hilltop aims to bring MG Health’s products – which are grown in the mountains two thousand metres above sea level – to the UK. 

COO of MG Health, Francois Ferreira described the UK as an “under-devloped” compared to other European countries such as Germany where cannabis-based medicines are more widely available, but the company sees a “real need” for the medicine amongst British patients. 

“When you see 1.4 million people going to the black market every day to self-medicate, you realise there is a massive need,” Ferreira says.

“At some point, it has got to give. 

“If we are able to play a role in that, we’d like to. We’d like to be able to support the efforts of people campaigning for easier access, and we believe we have a product that can be unbelievably beneficial to people and to their lives in this country.”

The first product that Hilltop and MG Health plan to bring to the UK is a high-THC flower containing 20 percent THC, a range of terpenes and other cannabinoids. 

“One of the reasons we want to partner with MG Health is because I’ve watched their journey in terms of quality assurance and quality plans and procedures,” Clegg adds. 

“Everything from their growing facilities, the way the plants are treated and cared for, the consistency that is bought in; everything is done to good agricultural practice and EU GMP compliance.

“We’ve got the partner, we’ve got the quality products here, it’s got the certification and we are in the stages of planning the supply routes from Lesotho to the UK, to the secure storage facility and to eventually get to the point where we can show this to clinicians, so they can prescribe it to patients.” 

With forecast revenues of £30.5 million per annum by 2023, Hilltop Leaf has ambitious plans to become one of the UK’s leading medical cannabis suppliers. 

The company estimates that by 2023, the total addressable UK market will amount to £360 million and with the support of its patient access partners, Hilltop aims to take 15 percent market share. 

According to Clegg, the company also plans to support the NHS develop the science surrounding medicinal cannabis. 

“We have the desire to contribute to the scientific development of medicines to help people in this country,” Clegg says

“We feel that as a medicine, cannabis and cannabinoids are very under researched and under explored.

“The NHS hasn’t adopted cannabinoids as a widespread source of product for patients yet, but I think that’s developing.” 

Continue Reading

Trending